How Should Investors React To Powell Industries, Inc.'s (NASDAQ:POWL) CEO Pay?
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Brett Cope has been the CEO of Powell Industries, Inc. (NASDAQ:POWL) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Powell Industries
How Does Brett Cope's Compensation Compare With Similar Sized Companies?
According to our data, Powell Industries, Inc. has a market capitalization of US$399m, and pays its CEO total annual compensation worth US$1.9m. (This figure is for the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at US$495k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.
That means Brett Cope receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Powell Industries, below.
Is Powell Industries, Inc. Growing?
On average over the last three years, Powell Industries, Inc. has shrunk earnings per share by 92% each year (measured with a line of best fit). Its revenue is up 32% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Powell Industries, Inc. Been A Good Investment?
Powell Industries, Inc. has served shareholders reasonably well, with a total return of 13% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Brett Cope is paid around the same as most CEOs of similar size companies.
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. Whatever your view on compensation, you might want to check if insiders are buying or selling Powell Industries shares (free trial).
If you want to buy a stock that is better than Powell Industries, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
